Pharma industry needs to adapt to survive, conference hears
By Ophélie Spanneut | Wednesday 18 April 2012
The current model of innovation in the field of health care needs a structural reform in order to survive, according to big names in the pharmaceutical industry. This was the opening message of the third conference organised by the European Commission, ‘Innovation in health care without borders’, which was held in Brussels, on 16-17 April.
Innovation in the field of health care is particularly tricky as the process is very slow and costly. According to the Commission, it costs on average €1 billion over a period of 10-15 years for a company to transform an idea into a pharmaceutical product that is at once viable, marketable and profitable. According to EuropaBio, the European association for bio-industries, the situation is only getting worse: in 2003, it took on average 11.8 years to develop a product, while in 2012, it takes 13.4 years. Requirements in terms of clinical tests are particularly held responsible for this.
EuropaBio therefore holds that the traditional innovation model is no longer valid. In the context of an economic crisis where the financing of the social security systems is problematic, the business model that had prevailed until now has come to the end of its lifespan, according to EuropaBio. Eucomed, the association representing the medical technology industry in Europe, also holds that medical technologies and drugs must become affordable. Innovations must have a satisfactory cost-efficiency ratio and add value in terms of public health. EuropaBio sees the crisis as an opportunity to find new ways to innovate - it insists that member states should be asked to help innovate, but should under no circumstances reduce costs without appropriate reflection.
It has emerged, during the course of the debates, that it is urgent to build new models for the financing of innovation because the current system of resorting to risk capital seems jeopardised. According to Denis Lucquin, president of Sofinnova, a risk capital company, this industry has had negative returns over the last 20 years in Europe.
Yet, to kick-start the development of new products by start-ups, this type of financing is currently crucial and represents nearly the entire budget.
In a statement, released on 18 April, Health Action International (HAI) and Transatlantic Consumer Dialogue (TACD) call on the EU to propose new innovation models in the field of health care. They want European taxpayers to benefit from investments through access to cheaper medical products. According to Tessel Mellema, of the NGO HAI, innovation incentive prizes are one lead. The Commission has been exploring this solution – announcing, on 16 April, the launch of an innovation competition with a €2 million prize for the inventor of a solution for the storage and transportation of vaccines. Indeed, vaccines are often rendered inefficient because the cold-chain is broken. Through this competition, the Commission wants to encourage scientific discoveries and mobilise new talents by reducing obstacles to entry. The Commission has stated that it is considering extending this system under the future research programme for 2014-2020, Horizon 2020.
Moreover, the EU executive has promised radical changes in Horizon 2020. The budget has increased by 46% compared with the 7th Framework Programme for research and development (2007-2013)
(1) and financial support rules will be simplified so that it will only take 100 days to access funding. The Commission is proposing €80 billion – of which €8.5 billion will be allocated to health, demographic change and well-being.
(1) This impressive increase, which was announced by the Commission, does not take into account the fact that Horizon 2020 merges various programmes (7th FP for R&D, ‘innovation’ chapter of the Competitiveness and Innovation Framework Programme (CIP) for SMEs, and EU contribution to the European Institute of Innovation and Technology). The increase is only 6%, rapporteur Teresa Riera Madurell (S&D, Spain) recently stressed.